A man big enough for the Pru

profile Peter Davis The Prudential's new boss sees it as his last big challenge, writes William Kay, after marketing anything from jukeboxes to custard
Click to follow
The Independent Online
IT WAS always going to take a big man, and a big ego, to succeed Mick Newmarch as chief executive of Prudential Corporation - particularly if the man in question had little experience of insurance or investment.

The Pru has for the first time in its history opted for an outsider: Peter Davis, who was ousted last June as head of the publishing group Reed Elsevier, bears more than a passing resemblance to his predecessor.

Andrew Teare, chief executive of English China Clays and one of the Pru non-executive directors who selected Davis from among their own number, said: "His experience of consumer markets is extremely relevant to the Pru, going forward. On the technical side, there is a huge wealth of actuarial experience and skills a manager can draw on. But his market and consumer focus is what the group needs in the next five years or so. It was just a compelling appointment, really."

"I don't underestimate the challenge," Davis admits. "But the business is very different from what it was in the past. My appointment marks a graduation of the business from a largely UK company to a much more international one. It is now quite significant in the US and growing fast in Asia."

While he has to cast his enthronement in that light to account for his self-confessed lack of technical knowledge of the Pru's operations, it is consistent with a career that has already spanned engineering, custard, supermarkets and books.

Although he has long ago acquired the honeyed London tones of the universal manager, Davis was born 53 years ago on wartime Merseyside. His father was sufficiently successful as a cotton trader to send his son to Shrewsbury public school.

There he found his fluency as a speaker stood him in good stead in school plays and at meetings of Young Conservatives. However, the formal advantages of such a distinguished seat of learning largely passed him by: he emerged with two A-levels, and a flea in his ear from his housemaster for wanting to follow in his father's commercial footsteps. "The ethos was certainly against it," Davis recalled.

"I remember my housemaster asking me what I was going to do when I left, ticking off the obviously respectable careers one by one. When I confessed I did not want to be a lawyer or a doctor or to go into the Church, he asked me in despairing terms what else I could want to do. `Go into business,' was my reply - which left him flummoxed. There was a long pause, and then he told me to ask my father about it, for clearly business was not quite nice."

Despite the affable face he presents to the outside world, that episode says much about Davis's single-mindedness. His apparently easy-going nature has deceived colleagues and rivals throughout his career into underestimating the extent of his ambition. But, as when the Pru job became available, he can be quick to react to opportunities.

When Davis left school he got a job at the Ditchburn Organisation, an engineering company that made office equipment, vending machines and jukeboxes. The 17-year-old Davis began in traditional style, pushing a broom in a store for a short time before moving on. Lacking the qualifications or aptitude to be an engineer or an accountant, he was dispatched to marketing.

Davis's response to his brief is instructive in light of his remarkably parallel challenge, on a far bigger scale, at the Pru. He immersed himself in his new role, studying marketing at night school.

His efforts won him £500 to spend on a travelling scholarship that covered America. He took a Greyhound bus from Disneyland in California to the advertising agencies on New York's Madison Avenue, returning with the ambition to become a chief executive of a sizeable corporation before he was 50. He made it with six years in hand.

However, "marketing" at Ditchburn, for someone of Davis's tender years, meant little more than selling. So at the first opportunity, he ditched Ditchburn in favour of a big company with a marketing bias and at least a US flavour. He wrote to, and received job offers from, Beecham, Procter & Gamble and others, but plumped for a marketing job at General Foods, the US-based Bird's custard group.

"Bird's Angel Delight was the first new product to come my way," said Davis, "and I put on nearly a stone in the six months before we launched it. The copywriting slogan I produced for it - `Tastes like strawberries and cream' - proved a great success, even if I'm not sure it was that much like either of them."

But, like many up-and-coming young executives in US corporations, Davis soon realised that if he was going to progress he would have to accept overseas postings. He had married in 1968, three years after joining General Foods, and did not want to take his family abroad. Instead, he took his burgeoning marketing skills to Key Markets, a modest supermarket chain owned by a company called Fitch Lovell, which itself was taken over by the Booker food group in 1990.

He progressed smoothly from marketing director to managing director of Key Markets. Davis was then promoted to the Fitch head office, where he was ideally placed to slash the supermarket chain in half, as part of a drive to concentrate on the biggest outlets.

But that exercise was so successful that it only demonstrated the logical conclusion of such an approach - to have no retail outlets at all. Fitch went wholesale and Davis went elsewhere.

Showing an early instance of the chutzpah that got him the Pru job, he wrote to David Sainsbury asking about employment prospects. He was taken into the J Sainsbury marketing department and was on the board within a year, at the age of 34.

Davis became managing director and one of the group's ruling threesome. But that is not quite the same as being the ruling one, and by this time, Davis had got the power bug. He contacted a headhunter, whose brief then included finding a new chief executive for Reed, which at that stage - 1986 - was a ragbag containing paper mills, manufacturing shower fittings, wallpaper and gas boilers, and producing such magazines as Woman, Woman's Own, Horse & Hound and Country Life.

In a possible dress rehearsal for his introduction to the Pru, Davis spent six months touring the group's operations before he took control at Reed. His strategic solution to Reed's problems was simple: concentrate on publishing and sell the rest. In 1992, this sequence culminated in the merger of Reed with the Dutch publishing group, Elsevier. But the format of that merger contained the seeds of his downfall. The board wanted the group to be run by an executive committee, but Davis felt cramped and after a few months began lobbying for a more unified approach.

However, he lost that battle and found himself in the corporate ejector seat nine months ago, with a pay-off of around £1m.

Davis toyed with buying a business, and also with becoming a company doctor managing a portfolio of part-time chairmanships. But, as he put it, "at 53, I felt I had one more big job left in me." Then Mick Newmarch was spat out of the Pru.

Comments